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MATTERS OF PUBLIC IMPORTANCE;Carbon Pricing – 01 Mar 2011

The bluster and hot air coming from the other side of the Senate chamber on this issue and the contrived outrage we have heard during the week demonstrates one thing, that no matter what response the government comes up with to tackle the monumental challenge of climate change those opposite will oppose it. They will oppose it because they want to delay, because they want to frustrate and because they want to obfuscate. Why do they want to stop action on climate change? Because the ranks of the coalition are dominated by climate change sceptics and climate change deniers.

If there is any better demonstration that the coalition are opposed to action on climate change it is that they previously rolled their own leader over this very issue. You might remember we previously had an agreement with the opposition, which was when Mr Turnbull was leader, to pass the Carbon Pollution Reduction Scheme and to get on with the business of tackling the greatest economic and environmental challenge to face our nation, and what did they do? They rolled their leader. Let us not forget that the current leader of the opposition, Tony Abbott, came to the leadership on a platform of opposing action on climate change. In fact he described the science of climate change as ‘absolute crap’. That explains a lot about where he is coming from and it explains a lot about where the opposition is coming from.

As a further demonstration of the opposition’s determination not to act on climate change, they refused to join the Multi-Party Climate Change Committee. We extended an invitation to them to work together with us, the minor parties and independents, to come up with a solution that was in the national interest, and they declined. This government is getting on with the job. We are working with the Greens and the Independents through the Multi-Party Climate Change Committee to come up with a solution that is in the national interest.

If you want to have a debate about election commitments then remember this: we went to the election promising action on climate change and we went to the election saying that the cheapest and fairest way to cut pollution while transitioning to a clean energy economy is to put a price on carbon. It is an interim price as a first step towards an emissions trading scheme. It is the right thing to do for the Australian economy and it is the right thing to do if you are a government that, unlike those opposite, is committed to action on climate change.

A fixed carbon price for the first three to five years of the scheme will help to provide certainty to business. The opposition would have you believe that they know exactly what the price impacts of this policy will be. They know already before we have announced the policy settings, before we have announced which sectors are to be included and excluded and before we have announced what assistance will go to households. They have got out their ouija boards and their crystal balls and they have worked it out. Let me just say, Nostradamus has nothing on them. What the opposition are trying to do with their outlandish claims is run a big, fat scare campaign. Anyone who tries to claim at this stage of the debate that they know the impact a carbon price will have on prices and households either has an exaggerated sense of their predictive powers or is just being downright dishonest.

When the party of the GST and the party of Work Choices suddenly discover cost-of-living pressures, you cannot help but be just a tad suspicious about their motives. But there are a few salient facts that they fail to point out when it comes to their scare campaign. For example, unlike so-called direct action, a carbon price raises revenue that can be used to assist households. When we put in place a carbon price, the money raised will not be used to prop up the budget. Every cent raised from the introduction of a carbon price will go to three things: assistance to families to help with their household bills; initiatives to help business to transition to a clean energy economy; and measures to tackle climate change and invest in a clean energy future.

The opposition also fails to realise that a carbon price is a more cost-efficient mechanism for tackling climate change. On the question of a carbon price and its effect on electricity prices, let us hear the words of Mr Rod Sims, an adviser to the Multi-Party Climate Change Committee. In November 2010 he wrote about the emissions reduction target of five per cent of 2000 levels by 2020:

If Australia wishes to meet this target it can choose between at least two approaches: continue using the current high cost and non market mechanisms … or introduce a carbon price. Electricity prices will in future be lower if we take the latter path of meeting a given greenhouse gas reduction target through the introduction of a carbon price.

The biggest driver of electricity prices in Australia is the need for significant network investment over the next five years, and the uncertainty caused by having no carbon price is also helping to drive up electricity prices. Of course a carbon price will change prices. That is the whole point of a market mechanism—it sends a signal and the market responds. The way that we begin to shift to an economy which produces less pollution is to make the goods that create less carbon pollution cost less than the goods that create a lot of carbon pollution.

The opposition would have you believe that, in introducing a carbon price, Australia would be moving ahead of other developed countries. Let us examine that claim. The European Union has had an emissions trading scheme in place since 2005. The New Zealand emissions trading scheme commenced for forestry in January 2008 and for other sectors on 1 July 2010. The South Korean Ministry of Environment initiated a trial ETS in January 2010 to operate until 2012. Denmark, the Netherlands, Norway, Sweden and Switzerland have carbon taxes of various forms currently in place. Several of these schemes have been operating since the early 1990s. To date, 139 countries have expressed their intention to be listed as agreeing to the Copenhagen Accord, and 85 countries, representing 80 percent of global emissions, have pledged emissions reduction targets or actions under the accord. Thirty-two countries and 10 US states are moving to emissions trading schemes. While the rest of the world economy moves to cut pollution, Australia risks being left behind.

We are the world’s highest per capita emitter of greenhouse gas emissions, higher even than the United States. If we are left behind, it will hurt our economy and cost Australian jobs. If we take the alternative path, however, and introduce a carbon price, this will drive innovation and build a stronger economy. Research from the Climate Institute estimates that 34,000 jobs would result from the clean energy boom if a price were put on carbon. I know those opposite are sceptical, but let us just look at what happened in my home state of Tasmania when the Tasmanian government made huge investments in wind energy. Now the Tasmanian company Roaring 40s, which is part owned by Hydro Tasmania, is exporting its knowledge of wind farm development, which is resulting in returns to the Tasmanian economy.

Of course, the federal opposition do not want to talk about the potential for investment in renewable energy that could flow from a price on carbon. After all, we are talking about a major structural reform to Australia’s economy, and every structural reform is inevitably followed by a scare campaign from those who oppose it. It is easy to put off reform, to ignore the challenges of climate change. However, such is the opposition’s stubbornness, such is their head-in-the-sand approach that they are not only saying they will oppose a carbon price but they say they will roll it back. This just demonstrates how reckless and irresponsible the coalition are with our economic and environmental future. You know what Mr Abbott’s policy of a rollback of a carbon price would do to Australia? It would create uncertainty for business and uncertainty about our energy security, and in an uncertain environment business investment dries up. It would remove household and industry assistance. It would open up Australia’s environmental standing to ridicule. This ridiculous policy is just another demonstration of why Tony Abbott cannot be trusted with Australia’s economic management.

In contrast to the opposition, who continue to deny and delay and frustrate action on climate change, this government is getting on with the job. We are committed to an emissions trading scheme, and in the lead-up to that scheme we will introduce a fixed price on carbon. We will use all of the money raised for household and business assistance and to tackle climate change. We are working through the Multi-Party Climate Change Committee to determine the policy settings. In the meantime, any claims made about the cost of a litre of petrol or a kilowatt of electricity are just idle speculation from an opposition that wants to run a scare campaign because they do not believe in action of any sort on climate change.